The Importance of Filing Zero-Due Returns for Sales Tax Compliance

Zero-due returns, also known as returns reflecting no sales or tax collected, are required to be filed in most states even if no sales tax has been collected. Failing to file a zero-due return can result in penalties.
There are several situations in which a business may need to file a zero-due return. One common situation is when a business wants to provide valid resale exemption certificates to vendors but does not have an obligation to collect sales tax from customers. Another situation is when a business has sporadic taxable sales but numerous tax-exempt sales, which can contribute to the establishment of sales tax nexus.
Even if there is no tax due, a return still needs to be filed. Failure to file a zero-due return can result in penalties in some states.